Business Model Design

Getting the Pieces Together

 What is a Business Model?

A business model is how a company creates

value for itself while it delivering products and
services to its customers and satisfying their
needs.
 Key Business Model Questions

1. How do you acquire customers?

2. After you have landed a new customer, how do you plan to

relate to that customer and manage the relationship (if at
all)?

3. How do you charge your customers? What is your revenue

model?

4. How much do you charge your customers? Can you

calculate your revenues for the next month, quarter and
year?
Key business model questions (cont’d)
5. Who are your key partners?

6. What key activities do you need to engage in to deliver your

value proposition?

7. What are your fixed costs?

8. What are your variable costs? Can you calculate your total
cost for the next month, quarter and year?

9. Does your revenue forecast demonstrate increased

profitability towards the end of the forecast period?
The Era of Fixed Business Plan is Over!
 Create Your Own Business Model
KEY KEY VALUE CUSTOMER CUSTOMER
PARTNERS ACTIVITIES PROPOSITIONS RELATIONSHIPS SEGMENTS

KEY
RESOURCES CHANNELS

COST STRUCTURE REVENUE STREAMS

The
The Value
Value Proposition Canvas
Proposition Canvas
The Value Proposition Canvas (Cont.)
Push Vs
Push Vs Pull
Pull
 Value Proposition

• What pain have you noticed?

• What core value do you deliver to the
customer?
• Which customer need are you satisfying?
 Value Proposition (Cont.)
• The VP statement is a clear and succinct statement (e.g.,
2-3 sentences)
that outlines to potential clients and stakeholders
a company's unique value-creating features

• “It draws interest and shares a success story within a

few words.

• Why you are different and worth getting attention.

• Distill the essence of your product/service in few words.

 Tips on how to craft a Unique VP
Statement
1. Answer what (product), who (customer), and why
(advantage)
2. Be different, but make sure your difference matter.
3. Target early adopters.
4. Focus on the benefits your customers derive after
using your product.
5. Pick your words carefully and own them.
6. Study other good VP statements
 Sample VP Statements
“Mrembo seeks to improve the socio-economic status of
vulnerable women in informal settlements by equipping them
with sufficient and dynamic skills sets to restore their dignity
and build self-sustenance through basic training on
hairdressing.”

“We offer efficient, reliable car hire services and deal with
drivers’ training and staffing. Our services are tailor made for
companies and individual who are in need of professional
drivers and reliable means of transport to help increase
productivity and lower the number of road accidents.”
 Customer Segment

• Which classes of customer groups are you

creating the values for?
• Who is your most important customer?
Checklist for Market Segment Usability
Segmentation Variables and Details – B2C
B2B Needs Based Segmentation Variables
B2B Feature Based Segmentation
Variables
Factors affection Consumers behavior
Product Adoption Curve
New Product Adoption Variables
 Key Activities

• What key activities does your value

proposition require?
• What activities are important the most in the
distribution channels, customer relationships,
revenue streams, …?
 Key Partners

• Who are your key partners/suppliers?

• What are the driving motivation for the
partnerships?
 Customer Relationship

• What type of relationship does the target

customer expects you to establish?
• How can you integrate that into your business
in terms of cost and format?
 Key Resources

• What Key resources does your value

proposition require?
• What resources are important the most in
distribution channels, customer relationships,
revenue streams, …?
 Distribution Channel

• Through which channels do your customers

want to be reached?
• Which channels work best? How much do
they cost? How can they be integrated in to
your and your customers’ routines?
 Cost Structure

• What are the most critical costs in your

business?
• Which key resources/activates are most
expensive?
 Revenue Stream

• For what value are your customers willing to

pay?
• What and how do they recently pay? How
would they prefer to pay?
• How much does every revenue stream
contribute to the overall revenues?
 Partners Activities Name……….. Company………. Customer relationships Customer segments

• What key activities do our Value proposition

• Who are our key value propositions
partners? require?
•…
• Who are our key
suppliers?
• Which key resources
are we acquiring
from our partners?
• Which key activities
d partners perform?
Resources
• What key resources do we
need:
o To create and offer a
Value proposition?
o For our distribution
channels?
o For our Customer
relationships?
• What value do we deliver
to the customer?
• Which one of our
customers’ problems are
we helping to solve?
• What bundles of
products and services are
we offering to each
segments?
• Which customer needs
are we satisfying?
• How do we get, keep,
and grow customers? • For whom are we
• Which customer creating value?
relationships have we
• Who are our most
established? important
• How costly they are?
customers?
• What are the
customer
archetypes?
Channels
• Through which channels
do our customer
segments want to be
reached?
• How do other companies
reach them now?
• Which ones work best?
• Which ones are most
cost-efficient?

• What are the most important costs inherent to our Costs • For what value are our customers really willing to pay? Revenues
business model? • For what do they currently pay?
• Which key resources are most expensive? • Which are the other sources of revenues?
• Which key activities are most expensive? • What are the pricing tactics?
Negative impact Positive impact
• What are the most important social benefits generating by our
• Which are the main negative impact of our business model?
business? And which KPI can we use?
• Which are the key indicators for our negative social impact? • Which SDGs does it contribute to reach?
 Get Out of the Building!
Do Environmental Mapping!
Turn Data to Actionable Insights
Turn Data to Actionable Insights
 Key Issues to See in Environmental
Mapping
• Market forces
• Key trends
• Industry forces
• Macro economics forces
Key Questions to Audit your Canvas With

• Does your model have a competitive edge

today?
• Is your model prepared for emerging trends?
• Is your model in line with evolving customer
needs?
• How will your model adjust with the macro-
economic shifts?
Revise, retouch and update your business
canvas!
Get your business pitch ready and
Tell it as a story!
Get to Work!